Recession Signal Slams Down

For Albert Edwards, This Is The “One Failsafe Indicator” Of An Inevitable Recession

 by Tyler Durden on 04/08/2016

When trying to time the next US recession, most economists – as one would expect – look at economic data. The problem … is that if the government is intent on putting lipstick on the pig that is US GDP, it will do just that … .

To avoid such purposeful obfuscation SocGen’s Albert Edwards looks at places where it is more difficult to fabricate and goalseek data. Conveniently, he has discovered precisely that in what calls a “failsafe recession indicator,” one which has stopped flashing amber and has turned to red. He is referring to whole economy profits data, which in his own words “shows a gut wrenching slump.”

What Edwards is referring to is not that different from what we posted about back in October when we said that on 5 of the past 6 times when corporate profits dropped 60%, the economy entered a recession. This time the drop is far worse, and it’s no longer just energy … .

Edwards lays out the reasons why he believes that “a recession now virtually inevitable”, and since this is Albert Edwards after all, he has a jovial follow up: not only will the US economy contract, it “will surely be swept away by a tidal wave of corporate default.” …

(More with quotes and charts.)


About icliks

Biding my time in central ms ... yours too, if ur reading this.
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